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Tuesday, August 18, 2009

Power generation firm Adani Enterprises will debut on bourses on Thursday, 20 August 2009. The shares of the company would be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The company had priced its initial public offer (IPO) at Rs 100 each, at the top end of Rs 90 to Rs 100 price band. The IPO received strong investors response. The overall book was covered 21.6 times. The offering represents 13.8% of the fully diluted post-issue equity share capital.

The qualified institutional investors segment was subscribed 39.4 times covered, the category comprising high networth individuals and corporates was subscribed 8.6 times and the retail investors segment was subscribed nearly 3 times.

Adani Power was the first Indian company to use new rules that allow companies to sign up anchor investors through a bookbuilding process, one day before the formal order taking starts. The company has allocated 5.28 crore shares at Rs 95 per equity share (at the mid-point of the price band) to six different anchor investors, some of which will take shares through several sub-funds in anchor portion of the Adani offering. The six buyers are: Ecofin, AIC Advantage Fund, CLSA, T Rowe Price International, Sundaram BNP Paribas Mutual Fund and Credit Suisse.

As per Securities and Exchange Board of India (Sebi) norms, there is a 30-day lock-in for anchor investors.

The proceeds of the IPO will be used to partly finance the construction and development of its coal-based power projects at Mundra in Gujarat and Tiroda in Maharashtra. Post listing, promoter Adani Enterprises will hold about 73.5% in the power firm.

Adani Power is implementing two thermal power plants in Mundra in Gujarat and Tiroda in Maharashtra. It has signed power purchase agreements with Haryana, Maharashtra and Gujarat governments for selling power from the 2,000 megawatt Mundra and 1,320 megawatt Tiroda projects. The company also proposes to set up a 1,320- megawatt plant in Rajasthan and another 1,980 megawatt project at Dahej in Gujarat.

Currently, Adani Power has no operational power plant except the modest 330-MW unit I of Mundra Power Project (MPP)'s phase I, synchronized in May 2009. All others are either under execution or on the drawing board. This Unit I of MPP is expected to go on stream this month and the revenue generation is expected thereafter.

Domestic market ended the session with handsome gains backed by significant buying that emerged after Asian markets reversed losses. Higher US index futures also added to sentiments. Market touched the day’s high during afternoon trade mirroring firm European markets though afterwards pared gains a bit. However, monsoon worries continued to remain a key concern as 9 States have declared drought. Meanwhile, Finance Minister Pranab Mukherjee said that government has no proposal to write off loans taken by farmers as it did in 2008 in its first term in office. Further, India’s July export is down 26% from a year earlier. The BSE Sensex ended above 15,000 level and NSE Nifty closed above 4,450 mark.

Market opened on flat note today after reporting heavy selling in previous session. The US stocks markets closed lower on Monday, marking the worst single-session percentage loss in six weeks due to huge selling pressure. Slower-than-expected economic growth in Japan prompted a global sell-off on worries that an economic rebound may be further off than previously considered. Investors were not exciting by the news that the empire state manufacturing index moved into positive territory, signaling growth for the first time since April 2008. Further, Indian benchmark indices bounced back, as investors looked for some bargain chasing after yesterday’s sharp fall. Market touched day’s high during afternoon trade in line with recovery in other Asian stocks along with positive European markets.

Finally, market closed on positive note on account of sustained buying. From the sectoral front, all indices ended in green. Among those, most of the buying was seen in Capital Goods, Realty, Metal, Power, PSU, Auto, Bank, and FMCG stocks. Broader markets also followed the same trend as BSE Midcap and Smallcap stocks gained more than 2% each.

Among the Sensex pack 26 stocks ended in green territory and 4 stocks ended in red territory. The market breadth indicating the overall health of the market remained positive as 1741 stocks closed in red while 896 stocks closed in green and 78 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 250.34 points or (1.69%) at 15,035.26 and NSE Nifty ended up by 71 points or (1.62%) at 4,458.90. BSE Mid Caps and Small Caps closed with gains of 111.04 and 129.74 points at 5,496.55 and 6,341.45 respectively. The BSE Sensex touched intraday high of 15,134.51 and intraday low of 14,740.26.

India''s exports fell 26% from a year earlier in July, federal Commerce Secretary Rahul Khullar said on Tuesday. The country''s imports during July fell 35%-36% from the same month last year.

On the global markets front the Asian markets that opened before the Indian market, ended with gains. Shanghai Composite, Hang Seng, Nikkei 225, Singapore''s Straits Times Index and Seoul Composite closed higher by 40.25, 169.20, 16.35, 21.74 and 3.18 points at 2,910.88, 20,306.27, 10,284.96, 2,567.72 and 1,550.24 respectively.

European markets, which opened after the Indian market, are trading in green helped by some upbeat German economic data. In Frankfurt the DAX index is trading higher 29.77 points at 5,231.38 and in London FTSE 100 is trading up by 31.39 points at 4,676.40.

The BSE Capital Goods index was at 12,313.50 up by 432.33 points or by (3.64%). The main gainers were Siemens Ltd up by (5.2%), Punj Lloyd up by (4.86%), Larsen & Toubro Ltd. up by (4.66%), Aiaengineer up by (3.98%) and Jyoti Struct up by (3.68%).

The BSE Realty index was at 3,750.40 up by 87.70 points or by (2.39%). The main gainers were Indbul Real up by (5.47%), Housing Dev up by (4.01%), Penland Ltd up by (3.43%), Anant Raj In up by (3.03%) and DLF Ltd up by (2.95%).

The BSE Metal index was at 12,213.25 up by 274.34 points or by (2.3%). The main gainers were Hindalco up by (6.08%), JSW Steel up by (3.8%), Nalco up by (3.55%), Jindal Saw up by (3.48%) and Welsp Guj Sr up by (3.27%).

The BSE Power index was at 2,868.06 up by 59.30 points or by (2.11%). The main gainers were Siemens Ltd up by (5.2%) at Rs.453.95, Suzlon Energy up by (3.57%), Gmr Infrastr up by (3.44%), Crompton Greaves Ltd. up by (3.12%) and BHEL up by (2.76%).

The BSE PSU index was at 8,202.09 up by 144.20 points or by (1.79%). The main gainers were Andhra Bank up by (5.1%) at, Power Finan up by (5%), Corporation up by (4.47%), Contain Corp up by (4.38%) and Mangalore Refineries & Petroch up by (3.81%).

The BSE Auto index was at 5,393.24 up by 89.74 points or by (1.69%). The main gainers were Bharat Forge up by (8.5%), Mahindra & Mahindra Ltd up by (2.89%), Ashok Leylnd up by (2.73%), Escorts Ltd. up by (2.44%) and Apollo Tyre up by (2.3%).

Ahluwalia Contracts India Ltd advanced by 4.13%. The company informed regarding the recent Awards of New Projects worth of Rs 215.06 Crores.

HDFC ended up by 3.06%. The leading mortgage lender has started its Rs 4,300 crore immediate fund raising exercise. The amount to be raised from the issue of NCDs would be about Rs 4,000 crore. Further the company is issuing 1.1 crore warrants, each convertible into one equity share of the company within three years, at a price of Rs 3,000. The stock is now trading higher by (3.12%) at Rs. 2,320.

Bharti Airtel ended higher by 2.87% after telecom major received bids from more than a dozen overseas banks keen to fund its around USD 23-bn merger deal with top South African mobile company MTN.

Nava Bharat Ventures Ltd spurted 7.18% after the Reserve Bank of India raised the foreign portfolio investment limit in the company to 40%.

Moser Baer increased by 1.88%. The company launched new optical Media high-end products in India.

HCL Technologies Ltd. lost 0.85%. The company said that it has been informed by Reader''s Digest Association (RDA) that the latest developments at its end do not affect its relationship and engagement with HCL.

Tata Communications closed lower by 0.56%. The company, together with its supplier, Tyco Telecommunications, a business unit of Tyco Electronics and an industry pioneer in undersea communications technology, today announced that they have completed the installation, testing and commissioning of the TGN-lntra Asia {TGN-IA) Cable System.

Firm global cues helped domestic bourses recover some of the Monday's sharp losses. The BSE 30-share Sensex rose 250.34 points or 1.69%, off close to 100 points from the day's high and up close to 295 points from the day's low. The Sensex closed above psychological 15,000 mark. It had fallen below this mark on Monday in a broad based sell off. IT stocks fell. Buying was witnessed in capital goods, realty and metal stocks.

The market was volatile. The market after opening lower turned positive for a brief period before reversing gains tracking weak Asia. Market surged to fresh day's high in mid-morning trade. Market extended gains later as Asian stocks reversed losses and European stocks rose. Market pared gains in mid-afternoon trade.

Global sell-off after a disappointing US consumer sentiment report reigniting concerns about the global economic recovery triggered a sharp sell-off on the domestic bourses on Monday, 17 August 2009. The BSE 30-share Sensex fell 626.71 points or 4.07% at 14,784.92 on Monday.

There is no fresh proposal for a farm debt waiver and economic growth is expected to be 6 percent-plus in the current financial year ending March 2010, Finance Minister Pranab Mukherjee said on Tuesday.

Meanwhile, India's July exports have fallen 26 % from a year earlier, Trade Secretary Rahul Khullar said on Tuesday. Government is not condsidering ban on maize, soymeal exports as of now he said.

The monsoon situation remains grim with the country heading into the worst drought year over the last two decades. Monsoon was 56% below normal in week to 12 August 2009 and was 72% below normal in the soyabean growing central region in past one week, India Meteorological Department (IMD) said on 13 August 2009. Monsoon rains were 29% below normal during the period from 1 June 2009 to 12 August 2009. However, India's weather office has ruled out an early withdrawal for this year's monsoon which has still one and half months to complete its full journey. The progress of monsoon is closely watched as more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

Prime Minister Manmohan Singh said on Tuesday that the country was facing a drought threat India reportedly aims to raise planting of winter-sown crops and improve irrigation to make up for the damage to farms and to try to counter rising food prices after poor monsoon rains hurt crops such as rice and sugarcane..

India's growth projection could be trimmed due to a poor monsoon, but the country has adequate food stocks to counter inflationary pressures, the plan panel Deputy Chairman Montek Singh Ahluwalia said on Tuesday.

European shares were higher on Tuesday, with banks and commodity stocks gaining as investors awaited the release of German ZEW figures and U.S. housing starts later in the day. The key benchmark indices in France, Germany and UK were up by between 0.53% to 0.8%.

Asian shares clawed their way back from early lows on Tuesday following wild swings in Shanghai, as investors worried whether more bouts of profit taking will spell the end of the bull market that emerged from the financial crisis.The key benchmark indices in Hong Kong, South Korea, Japan, Singapore rose by between 0.21% to 0.85%.

Trading in US index futures indicated Dow could rise 63 points at the opening bell today, 18 August 2009.

The US markets plunged more than 2% on Monday, 17 August 2009 in its worst single-session percentage loss in six weeks.The Dow plunged 186.06 points, or 2%, to 9,135.34. The S&P 500 index fell 24.36 points, or 2.4%, to 979.73. The Nasdaq fell 54.68 points, or 2.8%, to 1,930.84.

The selloff came despite some encouraging economic news. Investors were uninspired by the news that the empire state manufacturing index moved into positive territory, signaling growth for the first time since April 2007. The reading came in better than expected at 12.08.

In more economic news, the Fed and treasury opted to extend the term asset-backed securities lending facility or the talf.

The BSE 30-share Sensex rose 250.34 points or 1.69% at 15,035.26 . The Sensex rose 349.59 points at the day's high of 15,134.51 in afternoon trade. At the day's low of 14,740.26, the Sensex fell 44.66 points in early trade.

The S&P CNX Nifty was up 71 points or 1.62% to 4,458.90. Nifty August 2009 futures were at 4455.10 at a discount of 3.80 points as compared to the spot closing of 4458.90. Turnover in NSE's futures & options (F&O) segment rose to Rs 73,655.74 crore from Rs 70,983.18 crore on Monday, 17 August 2009.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 5387.95 points or 55.84% in calendar year 2009 as on 18 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6,874.86 points or 84.24% as on 18 August 2009. FII inflow in calendar year 2009 totaled Rs 36,571.70 crore (till 13 August 2009).

Coming back to today's trade, the BSE Mid-Cap index was up 2.06% and the BSE Small-Cap index was up 2.09%. Both the indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1702 shares advanced as compared with 909 that declined. 79 shares remained unchanged.

From 30 share Sensex pack, 25 stocks rose and rest fell.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.35% to Rs 1946.40. The stock hit a high of Rs 1,955.80 and a low of Rs 1920. Reliance Industries has reportedly initiated talks with global energy majors to divest its shareholding in at least half-a-dozen overseas exploration blocks to reduce risk. RIL owns majority stakes, from 70% to 100%, in blocks in countries including Columbia, Oman, Australia and Yemen through its wholly-owned subsidiary Reliance Exploration and Production DMCC (REP DMCC).

As per recent report Prime Minister Manmohan Singh has constituted a panel of four senior cabinet ministers that will continuously review the government's position in the Supreme Court case over allocation of gas from the Krishna-Godavari basin to ensure that their ministries don't speak in divergent voices on the vexed issue.

The dispute between Reliance Industries and Reliance Natural Resources (RNRL) which is centered around the price and supply of gas from KG basin operating by RIL to RNRL for the power plants of Anil Dhirubhai Ambani group.

Oil exploration stocks rose as crude oil rose today, snapping two days of losses, as the dollar's decline spurred investors to purchase commodities as an alternative investment. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

India's largest state-run oil exploration firm by sales ONGC rose 1.46%. Crude oil for September delivery rose 0.15% to $ 66,85 a barrel on the New York Mercantile Exchange.

Cairn India rose 0.91%. As per recent reports, the company is likely to start crude production from its Rajasthan oil fields later this month. The company has already reached pricing agreements for the crude with principal buyers, Indian Oil Corporation and Mangalore Refinery and Petrochemicals.

Shares of three public sector oil marketing companies rose on expectations that a hike in retail fuel prices in early July 2009 may boost Q2 September 2009 results. BPCL, HPCL and Indian Oil Corporation (IOC) rose by between 2.48% to 3.6%. On 1 July 2009, the government had hiked petrol price by Rs 4 per litre and diesel by Rs 2 per litre.

The three public sector oil marketing firms reported strong Q1 June 2009 results as they incurred negligible underrecoveries on domestic sale of fuel at controlled prices. The strong performance was despite lack of any oil bonds from the government.

IT stocks extended recent fall on unexpected decline in a U.S. consumer confidence index after weak US retail sales and increase in weekly jobless claims. IT companies derive a lion's share of revenues from exports to the US. India's second largest IT exporter by sales Infosys fell 0.59% as its American depository receipt (ADR) fell 3.13% on Monday. India's largest IT exporter by sales TCS fell 0.19%. But, India's third largest IT exporter by sales Wipro rose 0.85% even as its ADR fell 4.8% on Monday.

Bank stocks rose on bargain hunting after the recent fall. India's largest private sector bank by net profit ICICI Bank rose 2.1% even as its ADR fell 6.82% on Monday.

Construction, capital goods shares rose on government's thrust on infrastructure. Higher government spending on infrastructure sector in 2009-2010 to provide a stimulus to the economy, may result in increase order flow for construction and capital goods firms and may help boost cement demand. Among construction shares, IVRCL Infrastructure & Projects, Gayatri Projects, Hindustan Construction Company, Nagarjuna Construction Company rose by between 0.59% to 4.78%.

Bidding is expected to start soon on 139 road projects covering 14,395 kilometres at a cost of about US$ 21 billion.

Power companies rose boosted as investor faith in power sector after recent robust subscription for initial public offers of NHPC and Adani Power. NTPC, CESC, Power Grid Corporation, Tata Power Company, Reliance Infrastructure, Jindal Steel and Power, GVK Power & Infrastructure rose by between 0.79% to 2.21%.

India's largest mobile operator by sales Bharti Airtel rose 2.87% on reports it has received offers from more than a dozen offshore banks eager to finance its merger with South African mobile-phone company MTN Group.

Today domestic markets are likely to open negative as the US markets closed in negative territory after the disappointment over the Japanese economy which showed lower than expected growth of 0.9% during the second quarter. The sentiments across Asia are weak and therefore in the domestic market one could witness another day of selling pressure. During the day the domestic markets are likely to trade range bound with negative bias.

On Monday, Domestic markets closed with heavy losses. The domestic market today nosedived deep into red terrain on huge selling pressure over the ground as unsatisfactory US consumer sentiment report weakened concerns about the recovery in global economy. Market closed near day’s low tracking negative European markets. In addition, weak Asian markets along with lower US index futures also took huge beating on the bourses. Meanwhile, benchmark indices also exhibited weakness on monsoon worries as the country is going towards the worst drought year over the last two decades. The BSE Sensex ended below 14,800 level and NSE Nifty closed below 4,400 mark. During final trading hours, market slipped sharply and widened its negative gap to end the day with huge losses on intense selling pressure over the stocks. From the sectoral front, investors offloaded positions across the sectors. Besides, Realty, Metal, Auto, Oil & Gas, Bank, Capital Goods, FMCG and Consumer Durables stocks contributed to most of the selling pressure. Broader markets also supported the negative sentiments as BSE Midcap and Smallcap stocks lost more than 3% each.

The BSE Sensex closed lower by 626.71 points or (4.07%) at 14,784.92 and NSE Nifty ended down by 24.95 points at 4,580.05. BSE Mid Caps and Small Caps closed with losses of 218.30 and 200.85 points at 5,385.51 and 6,211.71 respectively. The BSE Sensex touched intraday high of 15,284.23 and intraday low of 14,740.63.

On Monday, US stock markets closed lower. Profit taking in the wake of slower-than-expected economic growth in Japan triggered a global sell-off that sent stocks below their recent trading ranges and handed the major U.S. indices their worst single-session percentage loss in six weeks. With stocks looking overextended in the near term, overseas participants moved against stocks upon learning that Japan''s economy expanded at a slower-than-expected rate of 0.9% in the second quarter. In turn, Japan''s Nikkei shed 3.1%, while several other major Asian averages also finished with losses exceeding 3%. US light crude oil futures for September delivery closed at $66.75 per barrel lower by 1.1% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 186.06 points at 9,135.34, NASDAQ index declined by 54.68 points to 1,930.84 and the S&P 500 (SPX) closed lower by 24.36 points at 979.73.

Today major stock markets in Asia are trading negative. Japan''s Nikkei is trading down by 21.42 points at 10,247.19 followed by Hang Seng which is trading lower by 155.59 points at 19,982.155.59, and Taiwan Weighted is trading also trading lower by 132.77 points at 6,843.27.

Indian ADRs plunged on Monday. In the IT space, Satyam Computers was down 6.36%, Patni Computers was down 5.77%, Wipro was down 4.8% and Infosys was down 3.13%. In the banking space, ICICI Bank was down 6.82% and HDFC Bank was down 2.75%. In the telecom space, Tata Communication was down 6.12% and MTNL was down 4.8%. In other sectors, Sterlite Industries was down 8.63%, Tata Motors was down 7.63% and Dr Reddy''s Labs was down 5.04%.

The FIIs on Monday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,639.90 Crore and gross debt purchased stood at Rs 447.60 Crore while the gross equity sold stood at Rs 1,609.20 Crore and gross debt sold stood at Rs 821.00 Crore. Therefore, the net investment of equity reported was Rs 1,030.70 Crore and net debt was Rs (373.40) Crore.

On Monday, the partially convertible rupee ended at 48.95/96 per dollar, 1.47% weaker than previous close at 48.24/25. Rupee lost the strength against the dollar on the back of huge selling pressure in the local stock markets that led to huge losses in benchmark indices raising further concerns of greenback inflow.

On BSE, total number of shares traded were 37.72 Crore and total turnover stood at Rs 4,977.50 Crore. On NSE, total number of shares traded were 83.57 Crore and total turnover was Rs 15,425.56 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 60045516 shares, followed by Unitech with 48357785, DLF with 10765817, Tata Steel with 9396975 and Idea Cellular with 8828467 shares.

On NSE Future and Options, total number of contracts traded in index futures was 787408 with a total turnover of Rs 16,578.8 Crore. Along with this total number of contracts traded in stock futures were 526933 with a total turnover of Rs 16,261.97 crore. Total numbers of contracts for index options were 1596210 with a total turnover of Rs 36,217.85 Crore and total numbers of contracts for stock options were 60574 and notional turnover was Rs 1,924.57 Crore.

Today, Nifty would have a support at 4,491 and resistance at 4,596 and BSE Sensex has support at 14,536 and resistance at 14,896.

Bharti Airtel has received bids from 13 banks from US, EU & Asia, of US$500mn each for funding its merger with MTN. (ET)

L&T to initiate its third round of major business restructuring in 2010 and has appointed consultants McKinsey and Bain to guide on the same. (BS)

HDFC has raised Rs43bn through a QIP issue of non-convertible debentures with attached warrants that entitle the holder to buy its shares at ~Rs3,000 per share within three years. (ET)

The Government plans to fix the price band of Oil India’s proposed initial public offering at Rs1,200-1,450 per share. (ET)

NTPC may move SC on RIL gas row this week. (BS)

The Government has approved shifting of Cairn oilfield delivery point. (BS)

The petroleum and power ministries are exploring the option of a mutually acceptable solution to the ongoing legal battle between NTPC and RIL. (ET)

TCS to hold a majority 74% stake in the JV with the Maharashtra Government, MahaOnline, for making government services available online. (ET)

Bharti Airtel may look at selling bandwidth or connectivity on its undersea cables to global operators. (ET)

Tata Power has received approval of 80% of the land owners in Raigad district for the acquisition of land, required for its 2,400mw imported coal-based power project. (FE)

Cairn JV has discovered a market price of US$6.75/mBtu for the fuel from the Ravva Satellite field. (BS)

RIL to allow scrutiny by any government agency for the expenditure incurred on development of gas fields, where Comptroller and Auditor General of India (CAG) has not been able to complete audit since 2007 for want of more information. (BS)

Essar Energy has submitted a bid to acquire Shell’s UK refinery complex Stanlow along with two German refineries. (ET)

A global scare, triggered by a sharp fall in the Chinese market spread like wildfire. Time makes more converts than reason. So, use this opportunity to take position rather than exit. Don’t let the screaming headlines increase your fear. Instead, dare we say you could get a little greedy.

A weak report on consumer confidence in the US raised fresh doubts over the global economic recovery. Even news that Japan is out of recession failed to sooth frayed nerves. A correction was anyways overdue since the rally started in early part of March.

Asian markets, though better this morning, are swinging wildly. We expect a choppy opening. However, a positive close for the key indices is something which should not surprise.

There is a school of thought that believes that despite the drought India is still capable of clocking healthy growth. Big worries remain the inevitable return of high inflation and the ballooning fiscal deficit. Deep pocket funds have the cash and the intent to buy. Immediately sprucing up the main indices is surely not the priority for now.

FIIs were net sellers at Rs12.27bn in the cash segment on Monday on a provisional basis while the local funds pumped in Rs4.6bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs2.56bn.

On Friday, the foreign funds were net buyers at Rs10.3bn in the cash segment. Their net purchases of Indian stocks have crossed $7.7bn year-to-date. Mutual Funds were net buyers of Rs2.58bn in the cash segment on Friday.

US stocks joined the slump in global equities on Monday after heavy overnight losses in China translated into sharp selling on Wall Street, dragging the benchmark S&P 500 index below 1,000. Confidence in an economic recovery was damped by weaker-than-expected consumer confidence in the US and Japan's second-quarter GDP data, both of which missed the average expectations. Oil prices fall and base metals slid.

The Dow Jones Industrial Average lost 186 points, or 2%, to 9,135.34 after having lost as much as 204 points earlier. The S&P 500 index fell 24 points, or 2.4%, to 979.73. Both the Dow and S&P 500 closed at three-week lows. The Nasdaq Composite index lost 55 points, or 2.8%, to 1,930.84 ending at a one-month low.

Stock declines were broad-based, with 28 of 30 Dow stocks sliding.

US stocks fell last week for the first time in five weeks.

A roughly five-month rally hit a roadblock last week after a worse-than-expected consumer sentiment report on Friday. Signs that the US economy is stabilizing have more or less lifted stocks since March, with the S&P 500 gaining 50%.

In the last month alone, the S&P 500 gained 15%. So, a pullback was imminent. But, it is unlikely to signal a bigger fall. US stock indices are still only down 2% or 3% from the highs. As of last Thursday, the Dow was at a nine-month high and the Nasdaq and S&P 500 were at 10-month highs. The market is likely to extend the recent advance but, the rise will not be without hiccups. It is going to be a lot more choppy.

The benchmark index for US stock options jumped the most in four months. The Chicago Board Options Exchange Volatility Index, also known as the VIX, spiked 15%, signaling a bigger stock pullback could be brewing. The VIX rose to 27.89, the highest since July 10.

The index, which measures the cost of using options as insurance against declines in the S&P 500, is down from a record 80.86 in November and above its average of 20 over its 19-year history.

Meanwhile, the London Interbank Offered Rate, or LIBOR, for three- month dollar loans rose for the first time in 17 days, climbing to 0.431% from 0.429% at the end of last week, according to the British Bankers’ Association.

There are some concerns that cautious American consumers could limit the pace of the economic recovery. While the housing and manufacturing sectors have started to stabilize, a weak labor market and higher oil and gas prices have kept consumers on the sidelines.

Underscoring the weakness in consumer spending, home improvement retailer Lowe's reported a worse-than-expected drop in second-quarter profit. Lowe's also issued a second-half outlook that is short of analysts' estimates. Shares plunged 10.3% and dragged on other retailers.

Home Depot and other retailers are due to report results later in the week.

US investors also reacted to a plunge in global stock markets. In Asia, Japan's Nikkei index plunged 3.1% after a report showed the economy emerged from recession in the second quarter, but analysts said the outlook was uncertain. China's main index slumped almost 6% on worries about a stock market bubble.

The hard-hit manufacturing sector in the US continues to show signs of improvement. The Empire State Manufacturing survey, a measure of activity in the New York area, rose to 12.1 in August versus a reading of negative 0.6 in July, according to the Federal Reserve Bank of New York. Any reading that is positive shows expansion in the sector.

The week brings a slew of economic news in the US. On Tuesday, the government reports on July housing starts and building permits, and July producer prices, a measure of wholesale inflation. Later in the week, reports are due on leading economic indicators, jobless claims, state-by-state unemployment and existing home sales.

Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.47% from 3.56% on Friday.

US light crude oil for September delivery fell 76 cents to settle at $66.75 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery fell $12.90 to settle at $935.80 an ounce.

In currency trading, the dollar gained versus the euro and fell against the Japanese yen.

European shares fell sharply, paced by banks and miners. The pan-European Dow Jones Stoxx 600 index declined 2% to 224.21, down for the second session in four and trading back at levels not seen since the end of July.

The UK's FTSE 100 index dropped 1.5% to 4,645.01, while Germany's DAX index fell 2% to 5,201.61 and the French CAC-40 index skidded 2.2% to 3,419.69.

It was a heart breaking start to the week as the Indian markets extended losing streak to the second straight trading session on Monday. The BSE Sensex lost over 700 points in the last couple of trading days.

The 6% plunge in the Chinese markets was the major sentiment dampener on Monday as the Shanghai Composite index in China witnessed the biggest down fall for the first time since November. Cues from the rest of the world was also not that encouraging. Sell off was seen in the equity marets across Asia, Europe and also the US Futures markets.

Coming back to India, it was all round selling on the Indian bourses led by the BSE Realty index which was the top loser, down over 7% followed by BSE Metal and BSE Oil & Gas index which fell over 6% and 4.5% respectively.

Even the Mid-Cap and the Small-indices ended in deep red. The BSE Mid-Cap index fell 3.7% and the Small-Cap index declined 3%.

Indian markets may witness a decline as of much as 15% on concern of lower monsoon which would cut farm output and slash consumer spending, according to Bank of America Merrill Lynch.

Shares of Allied Digital rallied by over 5% to Rs446 after the CMD Nitin Shah was quoted as saying that the company bagged a US$100mn deal with a US-based original equipment manufacturer company. "Our part is to aid value-added services to them in terms of doing remote management of the desktop notebook and servers."

The stock opened at Rs419 and has hit an intra-day high of Rs496 and a low of Rs415 recording volumes of over 1.1mn shares on the BSE.

Aurobindo Pharma board approved the proposal to acquire 100% stake of Trident Life Sciences Ltd., subject to suitable agreements being executed between the parties for the same and conditions customary to dosing of the transaction. TLSL was incorporated in 2004 and has well established Clinical Research Organizations. It is in the process of implementing a liquid injectables facility in the Medak district near Hyderabad.

The stock ended lower by 2.6% to Rs645. The stock opened at Rs663 and has hit an intra-day high of Rs678 and a low of Rs636 recording volumes of over 49,000 shares on the BSE.

Following other commodity prices, crude prices ended lower on Monday, 17 August, 2009. Prices fell as dollar strengthened following a huge sell off in international equity market overnight. The Chinese market led the pack of decliners.

On Monday, crude-oil futures for light sweet crude for September delivery closed at $66.75/barrel (lower by $0.76 or 1.1%). During intra day trading, crude fell to an intra day low of $65.23/barrel. Last week, crude ended lower by 4.8%.

For the month of July, 2009, crude ended lower by a marginal 0.6%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 55% since then. Year to date, in 2009, crude prices are higher by 42%.

In the currency market on Monday, the dollar index which weighs the value of dollar against a basket of six other currencies, rose by 0.4%.

The key benchmark indices may extend Monday's (17 August 2009) heavy losses tracking weakness in most of Asia and slump in US stocks on Monday. The concerns over poor progress of India's annual monsoon will remain.

Global sell-off after a disappointing US consumer sentiment report reigniting concerns about the global economic recovery triggered a sharp sell-off on the domestic bourses on Monday, 17 August 2009. The BSE 30-share Sensex fell 626.71 points or 4.07% at 14,784.92 on Monday.

The monsoon situation remains grim with the country heading into the worst drought year over the last two decades. Monsoon was 56% below normal in week to 12 August 2009 and was 72% below normal in the soyabean growing central region in past one week, India Meteorological Department (IMD) said on 13 August 2009. Monsoon rains were 29% below normal during the period from 1 June 2009 to 12 August 2009. However, India's weather office has ruled out an early withdrawal for this year's monsoon which has still one and half months to complete its full journey. The progress of monsoon is closely watched as more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

India reportedly aims to raise planting of winter-sown crops and improve irrigation to make up for the damage to farms and to try to counter rising food prices after poor monsoon rains hurt crops such as rice and sugarcane.

Most Asian stocks fell today, amid concern the global economic recovery will fail to meet investors' expectations.The key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan fell by between 0.14% to 1.45%. But Japan's Nikkei Average rose 0.38%.

The Shanghai Composite Index lost 0.78%, extending yesterday's 5.8 % slump, which was the steepest since November 2008.

The US markets plunged more than 2% on Monday, 17 August 2009 in its worst single-session percentage loss in six weeks.The Dow plunged 186.06 points, or 2%, to 9,135.34. The S&P 500 index fell 24.36 points, or 2.4%, to 979.73. The Nasdaq fell 54.68 points, or 2.8%, to 1,930.84.

The selloff came despite some encouraging economic news. Investors were uninspired by the news that the empire state manufacturing index moved into positive territory, signaling growth for the first time since April 2007. The reading came in better than expected at 12.08.

In more economic news, the Fed and treasury opted to extend the term asset-backed securities lending facility or the talf.

The Nifty closed below its support zone of 4,400-4,500 on weak global cues and profit-booking. Worries about the pace of the global economic recovery and poor monsoon added to the gloom. Metals, realty and oil & gas stocks led the sell-off. By the close of the Indian trading session, European markets were down over 2 per cent. The 158 declines in Dow futures indicated a weak opening.

A blend of unwinding long positions and formation of some short positions are visible in the Nifty August futures. The Nifty August futures closed at a discount to the spot and added an open interest (OI) of 2.01 million shares. Intraday trading volume suggested a long build-up when Nifty fell below 4,400. The Nifty September futures closed at a premium and added an OI of 607,850 shares, indicating creation of long positions.

The Nifty is expected to face a strong resistance between 4,400 and 4,500 as there was some unwinding in 4,400 and 4,500 puts and a fresh build-up of OI in 4,400-4,500 calls. The OI in 4,500 calls increased by 1.76 million shares, which indicates that the Nifty is unlikely to move above 4,500. The 4,400 call also added an OI of 939,800 shares through a blend of buy and sells.

The 4,500 level, which acted as indicative support for the market in the last two weeks, is expected to face major resistance levels going forward. The 4,500 puts witnessed short covering of 1.02 million shares, mostly from put writers.

The 4,400 put witnessed unwinding of 151,400 shares, mostly in the form of profit-booking from put buyers, while the 4,300 put holds the highest OI among put options, indicating that the Nifty has support around 4,300-4,400 in the near future.

We recommend a sell in the stock of Nagarjuna Construction Company from a short-term perspective. It is apparent from the charts that the stock was on an intermediate-term uptrend from its March low of Rs 34 to its July high of Rs 159 (a 52-week high). However, encountering significant resistance in the band of Rs 150 and Rs 160, the stock reversed direction. A negative divergence in the weekly relative strength index supports the stock’s reversal. Since July peak, it has been on a short-term downtrend. On August 10, the stock tumbled 6 per cent penetrating its intermediate-term uptrend-line as well as 50-day moving average. Moreover, the stock reinforced the downtrend by slipping 6 per cent on August 17. The daily RSI is on the brink of entering the bearish zone and weekly RSI has entered the neutral region from the bullish zone. We are bearish on the stock from a short-term horizon. We expect it to decline until it hits our price target of Rs 109. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 129.

Precious metal prices fell on Monday, 17 August, 2009. Prices fell as dollar strengthened following a huge sell off in international equity market overnight. The Chinese market led the pack of decliners.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Monday, gold for December delivery ended at $935.8, lower by $12.9 (1.3%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by almost 1.1%. After four consecutive weekly gains, this was yellow metal's first weekly drop. Year to date, gold prices are higher by 5.4%.

Gold ended July, 2009 higher by 2.8%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (9%) since then.

On Monday, Comex silver futures for September delivery lost 74.7 cents (5%) to $13.975 an ounce. Last week, silver ended higher by 0.23%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 25.5% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar index which weighs the value of dollar against a basket of six other currencies, rose by 0.4%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for October delivery closed lower by Rs 18 (0.12%) at Rs 14,877 per 10 grams. Prices rose to a high of Rs 14,900 per 10 grams and fell to a low of Rs 14,811 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 635 (2.7%) lower at Rs 23,079/Kg. Prices opened at Rs 23,680/kg and fell to a low of Rs 22,820/Kg during the day's trading.